Challis,having thought more about your comment that the folk icons are the same people as 30 years ago, I think this is true, and for more reasons than I gave before as a somewhat naive defender of the genre. And I do sympathize with your frustration, having been there myself. But I've given up wishing folk music would get more hip and become more popular.
As for the "money couldn't possibly be so tight," I'm afraid it is. If you look at the finances of an outfit like Topic records, you'll see that they couldn't possibly afford to develop artists the way a pop label can. Nobody gets rich on folk music, least of all a record company. We are talking vast, orders of magnitude differences in the audience numbers for pop albums and folk albums. Being by nature small, poor organizations, folk labels also have small staffs with very little turnover; Tony Engle's been head honcho at Topic for 30 years or more, and even before that he had creative input! This helps to explain why the artist rosters stay the same. Finally, in today's technological environment, a small-scale folk release can make more money for an unknown artist if he/she produces it him/herself without the involvement of a company. Distribution via internet and at gigs leads to smaller sales than being in shops, for sure, but with no label taking a cut you can often make more money anyway. What helps Norma and Martin Carthy and makes being with Topic worthwhile for them is precisely the fact that they are so established. They don't need the promotion to get their name known to the folk-buying customer in a Virgin Megastore. A new, unknown folkie would cost Topic a lot in promotion to get the name out there, which they then would charge to the artist. Many, many bands I know on established labels complain bitterly that they have to have an album to tour, and they have to tour to sell albums, but they never make any money on either!
As for popularity, the sad fact is that traditional folk music had broad appeal for young people during only one period of the recorded-music age: about 1957 to about 1970. At that time, Skiffle and folk acted mainly as feeders into rock bands. Most of the singers who DID excite young people drifted from traditional songs to their own songs. So Bob Dylan, Judy Collins, Joan Baez, Marianne Faithfull, all went their own way and essentially created the singer-songwriter genre, which still attracts young people today. Guys who were into the blues, likewise, decided to write their own songs, so we got the Beatles, Clapton, Zeppelin, etc, instead of blues bands doing traditional music. These days, traditional songs are taken up by only a few youngsters (in the US, people like the members of Cordelia's Dad; in the UK Kate Rusby and Co).
Even those who do take up trad songs often do the same thing their idols did, give them up for original songs. When I was a teen in the 1980s, I used to go to concerts by 10,000 Maniacs, and Natalie Merchant used to sing "Do You Love an Apple" and "Just as the Tide was a-flowing." By about 1985 she had stopped singing folksongs entirely. Likewise the Equation, who are kind of like a latter-day English 10,000 Maniacs. They could be doing folk music, but choose otherwise.
So in the UK there was not a big movement after Norma's generation of people getting into folk, even despite Steeleye and Fairport rocking it up. There are always some folks (Oyster Band, Damien Barber, Kate Rusby, Karine Polwart, etc). But not very many. It just seems the songs have a limited appeal, and I have long since accepted this. Why should I expect young people today to enjoy "The Chaps of Cockaigny" like I do? They don't read the same books as I do or see the same films! In fact, there are many who argue pretty persuasively that if folksongs were to get more popular with young people, intense commercial pressures would spoil the very things I like about the genre. I don't 100% buy this, but I think it's possible.
That being said, the person who is closest to that higher order of magnitude we're talking about is Kate Rusby, not June or Norma. Rusby's albums are released in the US (which paradoxically is a bigger market for English folk than England) on the Compass label, which is larger and better-promoted than June Tabor's US labels (Shanachie and Green Linnet). And none of Norma's traditional albums, alone, with Waterson:Carthy, or with the Watersons, have ever been released here at all; you have to buy the imports on Topic. So in terms of the money and promotion, it's definitely going to the young people.
Finally, one thing that's encouraging to me is the fact that traditional song seems never to have been all that popular compared to pop music, going back to the last century. Yet here we are talking about it online. If you look at what the last generation of old-timers like Walter Pardon had to say, there was always a small cadre of people who cared about singing old songs, and the rest sang music-hall ditties, tin pan alley tunes, light opera, or nothing at all. When Walter was a young man, he had one uncle who sang traditional songs, and he had to learn all his songs off his uncle because he knew practically nobody else who cared for the songs (shame, Harry Cox lived not so far from Walter, but they never met). So that's not so different from today, and yet the tradition has survived. I predict there will be enough new voices to keep it alive until another revival period, and in the meantime I enjoy the old farts like Norma and Martin Carthy! The others of my own generation and younger don't understand my tastes, but then I don't understand theirs, either!
Anyway, sorry for the long essay! Hang in there Challis! I do sympathize, and I agree Norma is not going to attract hordes of youngsters into folk. But I began to follow folk music pretty young (about 17 or so) and I have since spent literally thousands of my dollars on folk. There will always be more like me to keep it alive.